China’s exports and imports plummeted much more than expected last month, official data showed yesterday, adding to worries about slowing growth in the world’s number two economy as it fights a trade war with the US.
Its politically sensitive trade surplus with the US narrowed to US$14.7 billion for the month from US$27.3 billion in January, the Chinese General Administration of Customs data showed.
China’s total overseas shipments sank 20.7 percent year-on-year and imports fell 5.2 percent, much worse than the 5 percent and 0.6 percent drops forecast in a Bloomberg News poll.
“Today’s trade figures reinforce our view that China’s trade recession has started to emerge,” Australia and New Zealand Banking Group Ltd economist Raymond Yeung (楊宇霆) said in a note.
“Looking ahead, we find little reason to expect a rebound in the near term on the back of a sluggish global electronics cycle,” Yeung said, adding it would weigh on China’s first quarter GDP growth.
However, analysts caution it is difficult to compare trends in China’s data at the start of the year due to the Lunar New Year holiday, which came in early February this year and can affect business activity.
Yeung estimated that China’s exports for the first two months fell 4.7 percent, and imports were down 3.1 percent.
An end to the months-long US-China trade dispute would help China’s hurting exporters — shipments to the US fell about 29 percent last month.
The US’ trade deficit with China hit a record US$419.2 billion last year, US data released this week showed.
China put its surplus at a lower but still record US$323.3 billion.
Exports of soybeans, a crucial crop across vast expanses of the US, fell 18 percent for the year as the tit-for-tat tariffs sent Chinese buyers elsewhere.
US President Donald Trump on Thursday said that negotiations were making progress, telling reporters at the White House that the talks were “moving along pretty well.”
Chinese Minister of Foreign Affairs Wang Yi (王毅) yesterday said that the two sides had made “significant progress” recently and blasted hawks in Washington who have advocated a “decoupling” between the two countries’ economies.
“To decouple from China is to decouple from opportunities, decouple from the future, and in a sense, to decouple from the world,” Wang said at a news conference in Beijing.
Earlier in the week Chinese Minister of Commerce Zhong Shan (鍾山) told reporters “there is still lots left to do” in trade negotiations.
In a move that could help the negotiations, China’s parliament is next week to pass a law regulating foreign investment and barring the forced transfer of technology by foreign firms to Chinese joint venture partners.
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